Plans for the development of 100,000 sq ft (9,290 sq m) of retail space at Canary Wharf have been given the go-ahead as part of the capital’s Crossrail project.

Canary Wharf Group (CWG) will develop the£500 million scheme, which is part of a major overhaul of rail transport across the capital. The retail space will be built above the Isle of Dogs Crossrail station, occupying two of the station’s seven levels.

CWG received planning permission just before Christmas and is likely to begin the first stages of construction work early this year. The project is due for completion in 2012.

CWG group secretary John Garwood said the space will be divided into one floor of convenience and non-destination operators and a floor of destination clothing, shoes and accessories retailers.

He said: “We are looking towards spreading out the attraction of Canary Wharf. Retail is a fundamental part of that. We will be carefully looking at the retail mix to reflect the surrounding areas.” Retailers at Canary Wharf include Reiss, Zara, LK Bennett and Hugo Boss.

Mayor of London Boris Johnson said: “Once Crossrail arrives in Canary Wharf it will act as the catalyst for a further economic boost, allowing the construction of more offices and other facilities including new shops and more hotels, creating lasting jobs over the coming decades.”

As part of the developer’s commitment to the project, CWG has contributed£150 million to Crossrail. The transport system will span from east to west London, including Heathrow Airport and passing through the city’s centre.

In central London new stations will be built at Tottenham Court Road, Farringdon, Paddington, Bond Street, Whitechapel and Liverpool Street. Trains from east and west London will link to these stations via two 21km underground tunnels.